BANKRUPT LAWS.
Bankruptcy laws, as now understood, were not known to the common law. Certain acts in Eng land, beginning with the statute 34 & 35 Henry VIII. c. 4, were first mainly directed against the crim inal frauds of traders. The bankrupt was treated as a criminal offender ; and, formerly, the not duly surrendering his property under a commission of bankruptcy, when summoned, was a capital felony. The bankrupt laws are now, and have for some time past been, regarded as a connected system of civil legislation, having the double object of enforcing a complete discovery and equitable distribution of the property of an insolvent trader, and of conferring on the trader the reciprocal advantage of security of person and a discharge from all claims of his creditors.
By the Act 6 Geo. IV. e. 16, the former statutes were consolidated and many important alterations introduced. All business under the earlier statutes was entrusted to commissioners appointed by the Lord Chancellor for each case. A subsequent stat ute, 1 & 2 Will. IV. c. 56, changed the mode of pro ceeding by constituting a Court of Bankruptcy, and removing the jurisdiction of bankrupt cases in the first instance from the Court of Chancery to that of Bankruptcy, reserving only an appeal from that court to the lord chancellor as to matters of law and equity and questions of evidence; and other im portant alterations were introduced. This was followed by the 5 & 6 Will. IV. c. 29. In 1869, bank ruptcies In the counties were transferred to the county courts and in London to the London Court of Bankruptcy. Its jurisdiction was transferred in 1883 to the King's Bench Division of the High Court of Justice. The bankrupt laws were codified in 1883 and in 1890.
Bankrupt laws were passed in the United States in .1800, 1841, and 1867, but they were repealed act a brief existence.
The act of 1867 was repealed by act of June 7, 1878 (taking effect September 1, 1878) but not to affect pending cases.
A bankruptcy act was passed July 1, 1898. It extends not only to corporations ordinarily speaking, but to limited or other partnership associations whose capital alone is respon sible for the debts of the association.
The act is not unconstitutional, though it provides that others than traders may be ad judged bankrupts on voluntary petition, though it allows the exemptions of the local laws, and though it provides that the dis charge of the debtor under proceedings at his domicil shall be valid throughout the United States; Hanover Nat. Bank T. Moyses, 186 U. S. 181, 22 Sup. Ct. 857, 46 L. Ed. 1113.
A person shall be deemed insolvent with in the act "whenever the aggregate of his property, exclusive of any property which he may have conveyed, transferred, conceal ed, or removed, or permitted to be concealed or removed, with intent to defraud, hinder, or delay his creditors, shall not, at a fair valuation, be sufficient in amount to pay his debts." Wage-earner shall include any per son who works for wages, salary, or hire, at a rate of compensation not exceeding one thousand five hundred dollars per year.
The courts of bankruptcy are the district courts of the United States and of the ter ritories, the supreme court of the District of :Columbia, and the United States courts of the Indian Territory and of Alaska. They are invested with such jurisdiction in law and at equity as will enable them to exercise original jurisdiction in bankruptcy proceed ings, in vacation in chambers and during their respective terms ; to adjudge persons bankrupt who have had their principal place of business, resided, or had their domicil for the preceding six months, or the greater portion thereof, within their respective ter ritorial jurisdictions, or who do not have their principal place of business, reside, or have their domicil within the United States, but have property within the jurisdiction of the court or have been adjudged bankrupts by competent courts of jurisdiction without the United States, and have property within their jurisdictions.